A genuine future for Grangemouth and Scotland
The closure of the Grangemouth refinery, Scotland's biggest mindustrial site, could be an opportunity to bloom in the green transition rather than an occasion for gloom
A plume of smoke and steam reaches for the azure sky above the Petroineos-operated complex at Grangemouth where Scotland’s only oil refinery is due to close in the first half of 2025 with a net loss of around 400 jobs. The decision by the joint owners, billionaire Jim Ratcliffe’s Ineos and China’s PetroChina, had been telegrammed in advance but has provoked the usual accusation of “industrial vandalism” leaving workers on the “scrapheap.”
Really? One might argue that this is an opportunity to put to the test governments’ (UK and Scottish) commitments to the “just transition” in marked contrast to the wholesale, deeply political closure of coal mines, eradication of thousands of miners’ jobs and abandonment of entire communities four decades ago. And to replace an inevitably ‘dirty’ industry with a green, sustainable one.
For many commentators and activists, however, the die is already cast and there’s no ‘just transition’ as it’s too late and any replacement industrial activity won’t be ready until the virtual end of this decade. This IMO is excessively premature and prejudicial before the evidence even though, undoubtedly, alternative plans for the site should have been drawn up years ago when it emerged that low-cost production elsewhere in the world meant Grangemouth had no sustainable future.
Project Willow
The eponymous government-backed task force, due to report next year, is reported to be exploring three options for the refinery site: low-carbon ‘green’ hydrogen, synthetic aviation fuels (to replace kerosene) and synthetic e-fuels. These all figure in plausible green transition scenarios and cannot simply be cast aside because of concerns about “real well-paid jobs.” That is a more preferable outcome than the ‘plan’ for a new purchaser to buy the refinery which appears to be flimsy.
There is a growing Scottish narrative that the green transition in the wider oil & gas industry threatens 100,000 jobs and this is cited as supporting ‘evidence’ for the argument that the UK should continue to invest in fossil fuels – or the past. The reputable Fraser of Allander Institute estimates that there are 58,000 direct and indirect jobs in the sector in Scotland. But these are not and never are static and can be replaced.
Its director, Prof Mairi Spowage, adds: “The energy transition does have to happen, oil and gas will decline, and policymakers must look to see how investment can be unlocked in these new technologies to ensure the transition happens in a way that protects workers and communities.” And that means a much more effective government-backed policy to invest in change and job-creation.
We have to avoid the early failures in the energy transition (offshore wind technologies) reported by Robert Pollock (on the Sceptical Scot site I co-edit) almost five years ago: “The MoUs signed by the SG with the five new entrant manufacturing corporations came to naught, whilst the two incumbents with which the Scottish Government had no MoUs, Siemens and Vestas, captured nearly all of the UK market.” Tens of thousands of related jobs went missing.
Green industrial strategy
The Scottish Government/SNP had an opportunity to convince a sceptical public and commentariat it has plans for the green transition via the industrial strategy it published last week. This set out to show “how, with the right focus, support, investment and partnerships, Scottish businesses and workers can innovate, capture new markets, create new jobs and diversify the workforce, solve problems with new products – and sell their expertise to the world.”
Its paper identified five growth/innovation sectors or clusters: wind; carbon capture & storage (CCS); green finance; hydrogen; clean energy-intensive industries. But, once more, it appears heavily dependent on foreign direct investment rather than domestic capital – or government equity.
The STUC was scathing: “This approach to industrial strategy is outdated and has been abandoned by the USA and across the EU. International investment to build on the huge opportunities from Scotland’s wind, hydrogen and carbon capture potential is welcome if the terms are set clearly – jobs in our communities, trade union recognition, and a fair share of the benefits across the country. This is being done all over the world and the Scottish Government has the power to do far more.”
As it happens, the EU issued at the same time a huge and ambitious report on European competitiveness written by Mario Draghi, ex-European Central Bank President, widely credited with saving the euro during the sovereign debt doom loop crisis by promising to “do whatever it takes” to do so.
This time he sets out three ways to “reignite growth”: Closing the innovation gap with the US and China in key technologies; seizing opportunities from the global decarbonisation process; and securing supply chains from geopolitical dependencies, that risk turning into vulnerabilities. He argues that this requires annual public/private investment of €750-800bn or around 5% of EU GDP…
The report has already found disfavour among spending hawks as it urges a reignition of the joint borrowing that took place under the post-pandemic #NextGenerationEU – but Draghi rightly argues that the alternative to this and other elements of his plan is “a slow agony.” (The positive approach is not helped by Ursula von der Leyen’s brutal defenestration of Thierry Breton as industry commissioner…but that’s another tale.)
What we can take from all this as we approach the tenth anniversary of #indyref1 is that we Scots need to summon some of the same ambitious spirit as we work together to move beyond Grangemouth’s old tech to a greener, more competitive economy generating jobs. In or out pf the Union.